S4-11 Computing the current and debt ratios [10-15 min]
Heart of Texas Telecom has these account balances at December 31, 2012:
Note payable, long-term $7,800
Prepaid rent 2,300
Salary payable 3,000
Service revenue 29,400
Supplies 500
Accounts payable $ 3,700
Accounts receivable 5,700
Cash 3,500
Depreciation expense 6,000
Equipment 15,000

Requirements
1. Compute Heart of Texas Telecom’s current ratio and debt ratio.
2. How much in current assets does Heart of Texas Telecom have for every dollar
of current liabilities that it owes?
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